Lawsuit Claims AGA, JetBlue Fail to Disclose Fees Paid to Airline for Travel Insurance Purchases

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AGA Service Company, Inc. and JetBlue Airways Corporation have misled consumers by failing to disclose that the airline retains part of the cost of optional travel insurance policies that can be purchased with airline tickets through JetBlue’s website.

According to the 20-page lawsuit, AGA sells trip insurance products through JetBlue’s booking path—i.e., the process whereby a customer purchases airline tickets on carrier’s website—without disclosing that the cost includes “an enormous sum” paid to JetBlue. The lawsuit alleges the defendants have attempted to “hid[e] the role” the airline plays in selling the insurance policies because consumers are “far less likely” to purchase policies if they’re aware that the price contains undisclosed fees kicked back to JetBlue.

Instead of disclosing the details of their relationship, AGA and JetBlue, the lawsuit alleges, instead inform consumers that AGA is the recommender, offeror and seller of the insurance policies marketed on JetBlue’s website, all while representing that the airline is not involved. According to the case, these representations give consumers the “clear impression” that AGA, and not JetBlue, will be paid the full cost of an insurance policy without any undisclosed fees. 

Moreover, JetBlue not only offers no service to a consumer in exchange for the fees it receives as part of their travel insurance purchase but is legally prohibited from selling any insurance services, according to the complaint. The suit argues that although JetBlue acts as an insurance agent who solicits sales and receives a commission on policies that are sold, the airliner “lack[s] the ability to perform insurance agent functions or receive commissions on policy payments.”

The lawsuit also contends that JetBlue’s contract of carriage permits the airline to collect only “additional taxes, fees or charges imposed by a governmental entity after the reservation has been made and paid for, but before transportation commences.” Per the suit, the fees the airline collects from the purchases of AGA insurance policies are not imposed by a governmental entity and thus are impermissible under JetBlue’s contracts with customers.

The plaintiff, a Florida consumer, says he purchased a trip insurance policy from AGA while purchasing an airline ticket on JetBlue’s website. At no point did either of the defendants disclose to the plaintiff that a portion of the price he paid for his policy went to JetBlue, the case claims.

“Instead, AGA hid that fee as part of the price of the insurance itself,” the lawsuit alleges.

The plaintiff says he would not have purchased the trip insurance policy had he known that his payment included “a large fee” for JetBlue.

The lawsuit looks to represent Florida citizens who, on or after March 16, 2017, purchased a travel insurance policy from AGA through the website of a travel retailer and had AGA pay a fee to the travel retailer as a result of their purchase.

The suit also looks to cover Florida citizens who, on or after March 16, 2017, purchased a travel insurance policy from a travel insurer through JetBlue’s website after purchasing a JetBlue flight and had JetBlue receive a fee as a result of their insurance purchase.

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